The global debt-to-GDP ratio hit a new all-time high of over 322% in the third quarter of 2019 with total debt reaching close to $253 trillion, according to a new report from the Institute of International Finance (IIF).
Emerging market debt exceeded $72 trillion (223% of GDP) while debt in mature markets topped $180 trillion (383% of GDP) in Q3 2019.
The IIF report said global debt is set to grow faster in 2020 and is estimated to exceed $257 trillion by the end of Q1 2020, driven mainly by non-financial sector debt.
“While borrowing costs remain very low, many countries are finding a debt-driven growth model increasingly difficult to maintain,” said Sonja Gibbs, managing director of global policy initiatives at the IIF.
“High and rising debt-to-GDP ratios are making debt service and refinancing more challenging, and the 2020s are likely to see a greater incidence of debt distress and restructuring.”